Income and Employment Verifications, What Utah Landlords Need to Know
Fact: renting a property in Utah always costs money. Sadly, few Utah landlords actually take the time to conduct a comprehensive income and employment verification on their prospective tenants. Typically, these are the same landlords, who after a costly eviction, find themselves asking “What happened?” Well, this article is designed to help both new and experienced landlords conduct a thorough income and employment verification.
Step 1: Have a criteria
We recommend all Utah landlords have a predetermined rental criterion in order to avoid an expensive fair housing violation (You can always view our rental criteria as an example). Part of a good criteria should be some type of triple rent rule, meaning the applicant must not spend more than one third of their monthly household income on housing. So if rent is $1,000, the applicant’s combined monthly income should be at least $3,000. Why one third? Well, most financial institutions and personal finance experts recommend you never exceed 40% of your income.
Step 2: Call their employer
Make sure your application requires prospective tenants to list their current employer’s name and phone number. Contact this employer and ask if the applicant is currently employed, to verify the amount they are paid, if their employment is temporary or long term and finally if they are full or part time. This should give you an idea of how risky the applicant is.
Step 3: Always require documentation
If you are unable to reach an employer or the applicant is self-employed, ask to see income documentation in the form of pay stubs, monthly bank statements, or annual tax returns. In fact, you should ask to see it anyway. Reviewing these types of documents will provide you with the information you need to make a good decision on the creditworthiness of your prospective tenant.
Remember, verifying income and employment is one of the most important things a landlord can do and it is in no way illegal to refuse to rent to people who can’t provide such documentation.